Shares in bluetooth chip and device-maker CSR jumped 6pc after it announced an
£91m all-share deal to buy US global positioning system (GPS) chip-maker
SiRF.

Joep van Beurden, CSR chief executive, said the deal will "significantly boost" the company's future sales as mobile phone handset-makers are looking for new technologies that combine GPS and bluetooth technology.

CSR

"There is a powerful, complementary fit between the technologies, skill sets and customer relationships of both companies and the way we both see our customers' needs evolving," he said. "Together we create a group substantially better placed to meet the challenges of today and to emerge even stronger from the current challenging market conditions."

Mr van Beurden said he expects the proportion of mobile phones, such as the Apple iPhone, containing GPS chips will double to 40pc by 2012.

Under the terms of the deal, SiRF shareholders will receive 0.741 CSR shares for each SiRF share, a 91pc premium on Monday's closing price. SiRF shareholders will own about 27pc of the combined company.

SiRF, which specialises in GPS chips for satellite navigation devices and advanced mobile phones, generated revenue of $232m (£157m) last year, and had $195m worth of assets as of December 27, 2008.

Cambridge-based CSR said it expects annual synergy savings of at least $35m a year, or 10pc of its cost-base. Mr van Beurden said the savings will be implemented within 60 days of the completion of the deal. It is understood that CSR is unlikely to make further redundancies after cutting 50 staff last year.

CSR reported full-year pre-tax losses of £6.4m, compared to a profit of £155m in 2007.